Reply to What is your "magic number" for retirement?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]People here sounds awfully sure of their future returns.

I'm in my late 50s and while I've studied the stagflation of the 1970s, I lived through the lost decade from 99-09 when stocks went nowhere, I think they lost 1% per year on average. So many investing statements that just were flat to down, month after month, year after year.

The idea that we might have another 10 years of no gains seems foreign no, but it shouldn't. Surely in the next 50 years it will happen.

Which is fine and healthy. But a lot of people here are saying things like, "I'm in the my 40s with 750k now which should be 4mm in my 60s".  And I'm thinking, well .. maybe.  [/quote]

Agreed. And most people's assumptions are based on a starting point and assume a minimum growth rate from there. But if someone retires at X amount, and the it proceeds to go down for an extended period of time, they further diminish their principle (which will then produce less and less income) until the markets turn around. So if you start with 5MM and it goes down long enough to hit 4MM or more, and your retirement success was predicated on 4% of 5MM, suddenly you're either living on less or having to take out a larger % of the 4MM.

The response is always, but historically..... But if you're caught retiring in one of the decades-long downturn, the historic returns don't mean anything to you. Best to run simulations on calculators like Firecalc that allow you to put in a shorter timeframe to see how your portfolio fares. [/quote]

Agree with both you and PP. It is important to always have a certain % in cash (to buy low) as well as a certain % (50%) of your needs met through predictable cashflow (e.g. pensions/SS/dividends/interest). Nest egg withdrawal would then be limited to 1-2%.[/quote]

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